What if I just endure it with a smile?
You should ask yourself, ""What will happen to my credit rating if I do not file for bankruptcy?"" For many individuals who are contemplating bankruptcy, they are already unable to meet their continuous debt obligations. If this describes you, your credit score suffers each month that you fail to make your monthly payments. To give you an indication, your credit score begins to suffer after 30 or 60 days of delinquency. If you allow a payment to become 90 days past due, it will remain on your credit report for up to seven years and have a significant impact on your credit score. As damaging or more destructive than filing for bankruptcy in the first place could be the occurrence of just a few of these events. Therefore, it is probably best to file for bankruptcy as soon as it becomes apparent that there is no fast way out of the situation. The higher your score is prior to submitting your case, the higher it will be after filing your case and receiving your discharge.
Credit and Debt Settlement Companies.
Many people make every effort to avoid filing for bankruptcy; for some, this includes entering into agreements with companies that promise a reduced monthly payment by consolidating their debt. These businesses are available in a diversity of flavors. However, that is a topic for another time. Many of them will enter into an arrangement with you in which you make a monthly payment to them, and they will either hold the money until they have sufficient funds to make an offer on a specific debt, or they will make modest monthly payments to all of the creditors at once. However, this does not prevent these creditors from reporting negatively to credit bureaus. It also does not prevent creditors from filing a lawsuit against you in state court, obtaining a judgment, and garnishing your wages. If they do resolve, it will appear as settled for less than the full amount, which will harm your credit score. In addition, if you compromise, you will likely receive a 1099 from the company and be required to report the amount forgiven as income on your taxes. This will either result in a reduced refund or an obligation.
How long does it remain on your report?
Firstly, if you are in a difficult financial situation and are having difficulty paying your rent or mortgage, this should not influence your decision to file. However, the length of time it remains on your credit report and the length of time it negatively impacts your credit are two very distinct things. Generally, a Chapter 7 bankruptcy will remain on your credit report for ten years. Chapter 13 bankruptcy will remain on your credit report for seven years after the case is discharged. Seven to ten years is a considerable amount of time. Seven to ten years is a long time, but you can still acquire cars, houses, and obtain credit during that time. In general, it takes approximately two years after a chapter 7 to qualify for a home loan (occasionally only one year), while auto loans and credit cards are available almost immediately. Not terrible, correct? You should proceed with caution here. Consider the offers you are obtaining and only accept the best. Applying for more than one or two credit cards simultaneously will not benefit you. Your ability to obtain credit will be contingent upon your income and credit score. One year after the discharge of a Chapter 7 case, I have observed clients whose credit scores were in the 500s prior to filing the case achieve scores in the 700s. On the contrary, I have observed clients with low scores return a few years later with the same low scores. So, what is happening there?
How to enhance your credit score following bankruptcy.
If you continue to behave the same way and nothing else has changed, your credit score will likely not change significantly. Depending on the sort of FICO score, the lowest possible score is between 300 and 403, with 300 being the lowest. The maximum possible score is approximately 850, but this also depends on the sort of score. If you do not use credit, your score will not change. What then can you do? My first recommendation is to visit www.annualcreditreport.com and obtain all three free credit reports. This is something that can be done once per year. Once you obtain these, you will need to examine them, possibly with the assistance of your attorney, to determine whether the credit reporting agencies are correctly reporting your discharged debts. If they are inaccurate and the creditor refuses to correct them, you may have recourse through your old bankruptcy case or through the Fair Credit Reporting Act (FCRA). Once your report is complete, you can begin reconstruction. It is recommended to begin with a secured credit card or a store brand card. With a secured credit card, the creditor typically requires a $300 to $500 deposit, which serves as your credit limit. Because they have the security of your deposit, the cardholder faces very little risk, but you benefit because they will report to the credit bureaus. If you need a car, a car loan with a reasonable monthly payment is another excellent way to improve your credit score, provided that you are able to and do make payments on time. IBR is my secret credit repair instrument. If you are living paycheck to paycheck and have federal student loans, you should at least investigate this program. IBR stands for Income-Based Repayment, and you can apply for it on the site listed below. https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven. The greatest benefit of this plan is that many insolvent individuals may be eligible for $0.00 payments. If you are eligible and you sign up for and are approved for a $0.00 or other payment, your lender will report each month that you make that payment (yes, even the $0.00 payment, if you are eligible) as an on-time payment to the credit bureaus. Your credit score will improve with each timely payment.
Steven Palmer, Esq.
Certified in both Ohio and Washington""
" - https://www.affordablecebu.com/